Dell could be sold for £15 billion

Michael Dell is buying back the computer business which carries his name for £15.5billion (24.4bn US dollars).

Mr Dell and the investment firm Silver Lake will pay shareholders 13.65 US dollars per share to leave the company on its own.

The price is 25 per cent more than the 10.88 dollar value of Dell shares before word of the buyout talks trickled out last month, but far less than Dell’s 26 dollar share price less than five years ago.

The complex agreement will allow Michael Dell to help the company turnaround away from the pressures of Wall Street and need to deliver strong results for shareholders every quarter.

Once the sale to the group is finalised Dell’s stock will stop trading on the Nasdaq nearly 25 years after the Texan firm, raised 30 million in an initial public offering of stock.

Microsoft is helping the deal by lending 2 billion dollars to the buyers.

The company will solicit competing offers for 45 days.

Dell’s rapid growth through the 1990s turned its founder into one of the world’s richest people with a fortune currently estimated at about 16 billion dollars.

Michael Dell, already owns nearly 16 percent stake in the company and will remain the CEO, contributing his existing stake in Dell to the new company.

Dell’s sale is the second highest-priced leveraged buyout of a technology company, after the 27 billion dollars paid for First Data in 2007.

The deal is the largest leveraged buyout of any type since November 2007, when Alltel sold for 25 billion dollars to TPG Capital and a Goldman Sachs subsidiary.

Leveraged buyouts refer to deals that saddle the acquired company with the debt taken on to finance the purchase.

PC sales generally fell 3.5 percent last year, according to the research group Gartner – the first annual decline in more than a decade and tablet computers are expected to outsell laptops this year.

Both Dell and its larger rival HP are trying to revive their fortunes by expanding into business software and technology consulting, two niches that are more profitable than making PCs.

Michael Dell said that while the company has made progress, turning it around will be easier under private ownership.

‘We recognize that it will still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision,’ he said.